During the first lockdown in March, thousands of businesses including pubs, across the country claimed on their business interruption insurance due to the enforced closure of venues.
Insurance companies hit back, disputing claims and arguing policies were not meant to cover unprecedented measures.
The FCA brought the test case with eight insurers taking part, which went to the High Court. Judges found most of the policies should pay out but a number of policyholders had to wait while proceedings were fast-tracked to the Supreme Court.
The High Court looked at 21 policy types as part of the test case and there has been rulings on 13 appealed against.
High Court judges were mostly in favour of insurers having to pay out to policyholders with a plethora of policy types. Some of these are now being appealed at the Supreme Court.
The case went to the Supreme Court yesterday (Monday 16 November) where the hearing is expected to last four days.
Frustration and anger
However, the decision is not expected for some weeks and could impact about 700 policies and around 400,000 policyholders.
NTIA chief executive officer Michael Kill said: “The night-time economy and hospitality sector has been decimated by the impact of Covid-19, not least by the behaviour of insurance companies in their management of business interruption claims since the closure of many businesses due to the pandemic.
“We are now at the final hurdle with the FCA Supreme Court appeal hearing this week and can feel an immense amount of frustration and anger from businesses at the insurance companies that have utilised this process, although expedited, to elongate the potential outcome.
“It has to be said you can only feel this strategy by insurers will purposely see many businesses close without seeing their claims fulfilled, bringing into question the integrity of the insurance sector.”